Northern Rock

seamus

Afuera wrote:

Maybe they just don't fancy the prospect of having to go begging the BoE for it later on?

I don't know. Unless you have short-medium term plans for it, then there's no reason not to let the BOE guarantee it and see what happens.

There's a certain amount of flame-fanning going on by the media. They love when a big company collapses and leaves thoudsands of distressed people in their wake. If NR collapsed, they'd love nothing better than a big aftermath special detailing the heartbreak and scandal.

Newstalk news yesterday was attempting to give the impression that NR HQ in Dublin was so overrun that they had to close their doors and "scores" of people were left without their money. In reality a couple of hundred people turned up and about 40 didn't get in before end of business.

I have a few quid in NR which I'd like to be able to get my hands on sharpish within the next 6 months, but after having a scan around, no-one else seems to be able to match their 4.5%. Rabo are offering 5%, but only till December (3.75% afterwards), and it'd be October before I even got around to opening an account with them.

A Random Walk

What guarantee? All we have is words. There was a "guarantee" given to UK pensioners in the past that turned out to be worthless. We have Brian Cowen's word to rely on that Irish depositors will be protected, and if you look at his speech today it is very carefully worded.

Until the terms are in print and passed by parliament this guarantee should be treated with extreme scepticism.

Sonnenblumen

A Random Walk wrote:

What guarantee? All we have is words. There was a "guarantee" given to UK pensioners in the past that turned out to be worthless. We have Brian Cowen's word to rely on that Irish depositors will be protected, and if you look at his speech today it is very carefully worded.

Until the terms are in print and passed by parliament this guarantee should be treated with extreme scepticism.

Good point A Random Walk, and I wouldn't be accept the bona fides of a verbal guarantee extending to Ireland. Irish Authorities are slow off the mark here and should be providing more assistance/assurance to Irish depositors.


Perhaps Brian Cowen should designate task to the brave Vagabond, afterall he's not a Muppet and he can also use the telephone!!

daveg

Personally, as a NR custom, what pissed me off and prompted me to withdraw my cash was that the NR dublin office fecked off on Friday at the normal time. No extended banking, no 24 hour number to reassure customers. Where as in the UK the banks were open nearly 24 hours a day in the UK.

tHE vAGGABOND

UK banks generally open on saturday mornings, where banks here would not dream of doing something like that as the damn bank unions would not have it. All they did was extend their usual saturday/weekend openings a bit..

Also they have the low call number [In a post of mine above] Thats manned from early in the morning to late at night, and was open at the weekend as far as I know. I got the number from one of the sunday newspapers, and it was also on ireland.com news reports every day since the messing broke.

To be fair, the irish office is admin and a call center. Thats one of the reasons I dont really understand people queueing there - its not a bank branch. I suppose its their only irish operation, and people need somewhere to queue and focus to their worry.

On the subject of what Cowan said, Ireland.com reports

...Mr Cowen also said that Irish and UK authorities have been in touch and that the chancellor's statement includes deposits held at the Northern Rock branch in Ireland...

Half way down > http://www.ireland.com/newspaper/breaking/2007/0918/breaking29.htm

Whats not clear about that?

A Random Walk

tHE vAGGABOND wrote:

Whats not clear about that?

So what happens if you do lose your money - are you going to sue Brian Cowen for his media comments? Are you going to take a case against Alastair Darling in the UK courts? Contrast that to the amounts you know for sure are protected by the deposit protection scheme which is enshrined in law.

Northern Rock should be compensating depositors for the increased risk they're taking on, 5% or whatever it is doesn't begin to do in my book.

democrates

There have been double-standards at work during this and not just with Sky news reporting.

The Sky reporter went along the queue of punters and asked why and when they "began to panic". They were portrayed as irrational lemmings. Savers were right to remove their money from a place of risk, particularly when the run started. Up until the point when Captain Darling gave a 100% guarantee there was no guarantee, just appeals for people to keep faith.

There's an old saying in Wall St. "Don't fight the tape" meaning the old ticker tape, the maxim was also in the dramatisation of the Barings bank collapse when the speculators peer said "Don't fight the market". As Keynes famously remarked - "The market can stay irrational longer than you can stay solvent".

This was the precise behaviour of the markets, both the credit market running scared from US sub-prime, and shareholders in Northern Rock, despite the fact the NR have below average defaults on their loan book, once the flock starts to run, you go with it. But they weren't portrayed as irrational lemmings, it was accepted as the normal behaviour it is.

When it came to the markets, the sky commentator said "the kindest thing that could happen is that a white knight comes in and takes them over". The kindness has emerged, HBOS and Lloyds TSB are offering are offering "200p/share or less" so despite the share price rebound on foot of yesterdays guarantee it is dropping again. They'll make an absolute killing getting that loan book for a song whilst rationalising 'excess' branches away and staff off the payroll.

Nice work by the oligarchy. Risk transferred to the taxpayer, reward kept for the market.